U.S. Rice on China Retaliation List

The Trump administration announced on Friday an additional 25% import duty on $34 billion worth of high tech imports from China. China immediately responded by announcing a similar duty hike on $34 billion worth of U.S. imports, including U.S. rice. Both countries’ actions are effective July 6, 2018.

The 25% duty on U.S. rice imports is consistent with China’s approach to retaliate against a wide variety of agriculture imports including soybeans, corn, wheat, cotton, beef, cranberries, orange juice, tobacco, and whiskies.

In Friday’s announcement, the Office of the U.S. Trade Representative (USTR) stated that higher duties on an additional $16 billion of imports from China are authorized, bringing the total value of trade affected to $50 billion. China’s release also contained pending duty increases on an additional $16 billion of U.S. imports.

According to USTR, Friday’s “action comes after an exhaustive Section 301 investigation in which USTR found that China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation are unreasonable and discriminatory, and burden U.S. commerce.” Section 301 is a part of U.S. trade law that allows the President to take certain actions, including raising U.S. import duties, to counter unfair foreign trade practices.

“The U.S. Sec. 301 investigation and the administration’s action are unrelated to rice trade,” said USA Rice COO Bob Cummings. “We are disappointed in China’s response and we will continue our decade-long press for access for U.S. rice in China. At the same time, we encourage the U.S. and China to resolve differences on technology transfer and intellectual property so duties on both sides can be removed.”